MS&AD, a Japan-based insurance company, has reached an agreement to acquire 6.3% stake in Australian annuity provider Challenger in a transaction valued at AUD500m ($393m).
The Japanese underwriter believes that the proposed acquisition will enable the company to tap the growing market for managing retirement savings in Australia.
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The transaction will be executed through the subscription of new shares in Challenger to be issued through an allotment by Challenger.
MS&AD said that it has options to raise its stake to 10% over a period of 12 months, which can be executed through open market, subject to market conditions, any necessary or desirable regulatory approvals and Challenger’s circumstances.
Established in 1985, Challenger manages AUD70bn ($55bn) of assets as of 30 June 2017. It operates two core investment businesses, a fiduciary Funds Management division and an APRA-regulated Life division.
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